SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C.  20549

                                    FORM 10-Q

(Mark  One)

 X   Quarterly  Report  under Section 13 or 15(d) of the Securities Exchange Act
---  of  1934
     For  the  quarterly  period  ended  September  30,  2005.
                                         --------------------

                                       or

     Transition  Report under Section 13 or 15(d) of the Securities Exchange Act
---  of  1934
     For  the  transition  period  from  _______________  to  ________________.

                          Commission File No.  0-23980
                                               -------

                     Southeastern Bank Financial Corporation
                     ---------------------------------------
             (Exact name of registrant as specified in its charter)

              Georgia                                58-2005097
              -------                                 ----------
     (State of Incorporation)           (I.R.S. Employer Identification No.)

                    3530 Wheeler Road, Augusta, Georgia 30909
                    -----------------------------------------
                    (Address of principal executive offices)

                                 (706) 738-6990
                                 --------------
                (Issuer's telephone number, including area code)

                                 Not Applicable
                                 --------------
    (Former name, former address and former fiscal year, if changed since last
                                     report)

     Check  whether  the  issuer:  (1) filed all reports required to be filed by
Section  13  or 15(d) of the Exchange Act during the past 12 months (or for such
shorter  period  that the registrant was required to file such reports), and (2)
has  been  subject to such filing requirements for the past 90 days. Yes X No
                                                                        ---  ---

     Check  whether the issuer is an accelerated filer (as defined in Rule 12b-2
of  the  Exchange  Act).  Yes X   No
                             ---    ---

     Indicate  by  check  mark  whether  the  registrant  is a shell company (as
defined  in  Rule  12b-2  of  the  Exchange  Act):  Yes     No  X
                                                       ---     ---

                      APPLICABLE ONLY TO CORPORATE ISSUERS

     State  the  number of shares outstanding of each of the issuer's classes of
common  equity,  as  of  the  latest  practicable  date:

     5,260,832 shares of common stock, $3.00 par value per share, outstanding as
of  October  31,  2005.


<PAGE>
<TABLE>
<CAPTION>
                       SOUTHEASTERN BANK FINANCIAL CORPORATION
                                      FORM 10-Q
                                        INDEX

                                                                                Page
Part I
<S>      <C>      <C>                                                           <C>
         Item 1.  Financial Statements (Unaudited)


                  Consolidated Balance Sheets as of September 30, 2005 and
                    December 31, 2004                                              3


                  Consolidated Statements of Income for the Three and Nine
                    Months ended September 30, 2005 and 2004                       4


                  Consolidated Statements of Cash Flows for the
                    Nine Months ended September 30, 2005 and 2004
                                                                                   6


                  Notes to Consolidated Financial Statements                       8


         Item 2.  Management's Discussion and Analysis of
                    Financial Condition and Results of Operations                 11


         Item 3.  Quantitative and Qualitative Disclosures about Market Risk      24


         Item 4.  Controls and Procedures                                         24

Part II Other Information

         Item 1.  Legal Proceedings                                                *

         Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds     25

         Item 3.  Defaults Upon Senior Securities                                  *

         Item 4.  Submission of Matters to a Vote of Security Holders              *

         Item 5.  Other Information                                                *

         Item 6.  Exhibits                                                        25


Signature                                                                         26
</TABLE>


* No information submitted under this caption


                                        1
<PAGE>


                                     PART I
                              FINANCIAL INFORMATION





                                        2
<PAGE>
<TABLE>
<CAPTION>
                  SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARY
                                Consolidated Balance Sheets
                                        (Unaudited)

                                          ASSETS

                                                            September 30,    December 31,
                                                                2005             2004
                                                           ---------------  --------------
<S>                                                        <C>              <C>
Cash and due from banks                                    $   23,983,922   $  13,186,173
Federal funds sold                                             18,595,000      12,326,000
Interest-bearing deposits in other banks                        1,012,167         512,024
                                                           ---------------  --------------
  Cash and cash equivalents                                    43,591,089      26,024,197

Investment securities
  Available-for-sale                                          185,315,184     152,637,090
  Held-to-maturity, at cost (fair values of
    $3,930,581 and $3,997,361, respectively)                    3,776,137       3,776,428

Loans held for sale                                            11,509,862      14,778,614

Loans                                                         550,392,839     479,391,209
  Less allowance for loan losses                               (9,094,402)     (7,930,366)
                                                           ---------------  --------------
    Loans, net                                                541,298,437     471,460,843

Premises and equipment, net                                    19,912,110      18,437,500
Accrued interest receivable                                     4,065,034       3,638,247
Bank-owned life insurance                                      11,756,930      11,463,591
Other assets                                                    4,613,831       4,300,801
                                                           ---------------  --------------

                                                           $  825,838,614   $ 706,517,311
                                                           ===============  ==============

                           LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
    Noninterest-bearing                                    $   93,156,543   $  80,798,355
    Interest-bearing:
      NOW accounts                                            100,341,899      80,417,657
      Savings                                                 285,032,114     225,533,029
      Money management accounts                                25,287,503      25,142,955
      Time deposits over $100,000                             106,856,773     106,835,743
      Other time deposits                                      35,198,471      38,056,932
                                                           ---------------  --------------
                                                              645,873,303     556,784,671

Federal funds purchased and securities sold
  under repurchase agreements                                  58,166,949      44,581,259
Advances from Federal Home Loan Bank                           52,000,000      40,000,000
Other borrowed funds                                            1,000,000         900,000
Accrued interest and other liabilities                          5,561,630       5,271,556
                                                           ---------------  --------------
        Total liabilities                                     762,601,882     647,537,486
                                                           ---------------  --------------

Stockholders' equity
  Common stock, $3.00 par value; 10,000,000 shares
    authorized; 5,279,929 and 5,287,100 shares issued in
    2005 and 2004, respectively; 5,260,832 and 5,249,604
    shares outstanding in 2005 and 2004, respectively          15,839,787      15,861,300
Additional paid-in capital                                     34,172,970      34,375,510
Retained earnings                                              13,917,732       8,878,633
Treasury stock, at cost; 19,097 and 37,496 shares in
  2005 and 2004, respectively                                    (270,064)       (497,127)
Accumulated other comprehensive income                           (423,693)        361,509
                                                           ---------------  --------------
        Total stockholders' equity                             63,236,732      58,979,825
                                                           ---------------  --------------

                                                           $  825,838,614   $ 706,517,311
                                                           ===============  ==============
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>


                                        3
<PAGE>
<TABLE>
<CAPTION>
                       SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARY
                                  Consolidated Statements of Income
                                             (Unaudited)


                                                  Three Months Ended         Nine Months Ended
                                                     September 30,             September 30,
                                               ------------  -----------  ------------  ------------
                                                   2005         2004          2005          2004
                                               ------------  -----------  ------------  ------------
<S>                                            <C>           <C>          <C>           <C>
Interest income:
  Loans, including fees                        $10,345,667   $ 7,073,443  $27,860,831   $20,504,835
  Investment securities                          2,001,470     1,844,988    5,702,611     5,264,296
  Federal funds sold                               131,878        28,770      283,247        46,000
  Interest-bearing deposits in other banks           7,400           497       16,599           540
                                               ------------  -----------  ------------  ------------
      Total interest income                     12,486,415     8,947,698   33,863,288    25,815,671
                                               ------------  -----------  ------------  ------------

Interest expense:
  Deposits                                       3,746,904     1,784,792    9,637,475     5,098,812
  Federal funds purchased and securities sold
    under repurchase agreements                    459,035       142,662    1,081,435       454,471
  Other borrowings                                 609,027       470,573    1,671,117     1,348,610
                                               ------------  -----------  ------------  ------------
      Total interest expense                     4,814,966     2,398,027   12,390,027     6,901,893
                                               ------------  -----------  ------------  ------------

      Net interest income                        7,671,449     6,549,671   21,473,261    18,913,778

Provision for loan losses                          589,260       493,103    1,576,223     1,013,023
                                               ------------  -----------  ------------  ------------

      Net interest income after provision
        for loan losses                          7,082,189     6,056,568   19,897,038    17,900,755
                                               ------------  -----------  ------------  ------------

Noninterest income:
  Service charges and fees on deposits           1,391,383     1,342,105    3,956,858     3,628,474
  Gain on sales of loans                         1,520,241     1,461,997    3,860,823     4,367,103
  Investment securities (losses) gains, net        (46,406)        1,833      (85,666)       (2,709)
  Retail investment income                          87,030       140,281      290,596       344,819
  Trust service fees                               163,855       147,239      470,791       405,309
  Increase in cash surrender value of
    bank-owned life insurance                      108,393       118,701      293,339       370,787
  Miscellaneous income                              57,727       108,354      385,030       320,298
                                               ------------  -----------  ------------  ------------
      Total noninterest income                   3,282,223     3,320,510    9,171,771     9,434,081
                                               ------------  -----------  ------------  ------------

Noninterest expense:
  Salaries                                       3,236,300     2,991,389    8,999,855     8,625,169
  Employee benefits                                768,789       693,087    2,354,158     2,190,042
  Occupancy expenses                               687,031       671,950    2,042,557     1,933,309
  Other operating expenses                       1,753,359     1,559,252    4,992,931     4,913,877
                                               ------------  -----------  ------------  ------------
      Total noninterest expense                  6,445,479     5,915,678   18,389,501    17,662,397
                                               ------------  -----------  ------------  ------------

      Income before income taxes                 3,918,933     3,461,400   10,679,308     9,672,439

Income tax expense                               1,320,336     1,139,062    3,590,990     3,187,288
                                               ------------  -----------  ------------  ------------

      Net  income                              $ 2,598,597   $ 2,322,338  $ 7,088,318   $ 6,485,151
                                               ============  ===========  ============  ============

                                                                                         (continued)
</TABLE>


                                        4
<PAGE>
<TABLE>
<CAPTION>
                    SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARY
                               Consolidated Statements of Income

                                          (Unaudited)

                                               Three Months Ended        Nine Months Ended
                                                  September 30,            September 30,
                                            -----------  -----------  -----------  -----------
                                               2005         2004         2005         2004
                                            -----------  -----------  -----------  -----------
<S>                                         <C>          <C>          <C>          <C>
Basic net income per share                  $      0.49  $      0.44  $      1.35  $      1.24
                                            ===========  ===========  ===========  ===========

Diluted net income per share                $      0.48  $      0.44  $      1.33  $      1.22
                                            ===========  ===========  ===========  ===========

Weighted average common shares outstanding    5,258,713    5,248,034    5,256,367    5,247,483
                                            ===========  ===========  ===========  ===========

Weighted average number of common and
  common equivalent shares outstanding        5,358,959    5,322,623    5,344,621    5,324,065
                                            ===========  ===========  ===========  ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>


                                        5
<PAGE>
<TABLE>
<CAPTION>
                         SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARY
                                 Consolidated Statements of Cash Flows
                                              (Unaudited)

                                                                     Nine Months Ended September 30,
                                                                        2005                2004
                                                                 ------------------  ------------------
<S>                                                              <C>                 <C>
Cash flows from operating activities:
Net income                                                       $       7,088,318   $       6,485,151
  Adjustments to reconcile net income to net cash
    provided by operating activities
      Depreciation and amortization                                      1,088,406             981,038
      Provision for loan losses                                          1,576,223           1,013,023
      Net investment securities losses                                      85,666               2,709
      Net amortization of premium on investment securities                 273,044             299,815
      Increase in CSV of bank owned life insurance                        (293,339)           (370,787)
      Loss (gain) on disposal of premises and equipment                      6,685              (1,385)
      (Gain) loss on the sale of other real estate                          (9,405)              8,272
      Gain on sales of loans                                            (3,860,823)         (4,367,103)
      Real estate loans originated for sale                           (199,233,926)       (211,143,576)
      Proceeds from sales of real estate loans                         206,363,501         215,741,585
      (Increase) decrease in accrued interest receivable                  (426,787)            304,738
      Decrease in other assets                                              38,039              26,858
      Decrease in accrued interest and other liabilities                   290,074             218,087
                                                                 ------------------  ------------------
        Net cash provided by operating activities                       12,985,676           9,198,425
                                                                 ------------------  ------------------

Cash flows from investing activities:
      Proceeds from sales of available for sale securities              23,852,712          24,315,495
      Proceeds from sales of held to maturity securities                         -             550,000
      Proceeds from maturities of available for sale securities         17,796,690          36,910,681
      Proceeds from maturities of held to maturity securities                    -           1,168,000
      Purchase of available for sale securities                        (75,180,015)        (76,872,338)
      Purchase of Federal Home Loan Bank stock                            (920,600)           (250,000)
      Proceeds from redemption of FHLB stock                               225,000                   -
      Net increase in loans                                            (71,523,269)        (40,831,295)
      Purchases of premises and equipment                               (2,572,201)         (5,088,112)
      Proceeds from sale of other real estate                              172,286             250,204
      Proceeds from sale of premises and equipment                           2,500              50,195
                                                                 ------------------  ------------------
        Net cash used in investing activities                         (108,146,897)        (59,797,170)
                                                                 ------------------  ------------------

Cash flows from financing activities:
      Net increase in deposits                                          89,088,632          59,677,144
      Net increase (decrease) in federal funds purchased and
        securities sold under repurchase agreements                     13,585,690         (16,060,149)
      Advances from Federal Home Loan Bank                              17,000,000          10,000,000
      Payments of Federal Home Loan Bank advances                       (5,000,000)                  -
      Proceeds from other borrowed funds                                   100,000             200,000
      Purchase of treasury stock                                                 -             (62,042)
      Payment of cash dividends                                         (2,049,219)         (2,046,410)
      Proceeds from stock options exercised                                  3,010                 390
                                                                 ------------------  ------------------
        Net cash provided by financing activities                      112,728,113          51,708,933
                                                                 ------------------  ------------------

                                                                                            (continued)
</TABLE>


                                        6
<PAGE>
<TABLE>
<CAPTION>
                SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARY
                         Consolidated Statements of Cash Flows
                                      (Unaudited)

     Nine Months Ended September 30,

                                                                 2005         2004
                                                              -----------  -----------
<S>                                                           <C>          <C>
          Net increase in cash and cash equivalents           $17,566,892  $ 1,110,188

Cash and cash equivalents at beginning of period               26,024,197   15,721,884

                                                              -----------  -----------
Cash and cash equivalents at end of period                    $43,591,089  $16,832,072
                                                              ===========  ===========
Supplemental disclosures of cash paid during the period for:
        Interest                                              $12,536,090  $ 7,191,021
                                                              ===========  ===========
        Income taxes                                          $ 3,560,000  $ 3,091,000
                                                              ===========  ===========

Supplemental information on noncash investing activities:
        Loans transferred to other real estate                $   109,452  $   311,905
                                                              ===========  ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>


                                        7
<PAGE>
             SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                               September 30, 2005

Note  1  -  Basis  of  Presentation

The  accompanying  consolidated  financial  statements  include  the accounts of
Southeastern  Bank  Financial  Corporation,  formerly  Georgia  Bank  Financial
Corporation,  and its wholly-owned subsidiary, Georgia Bank & Trust Company (the
"Company"  or  the  "Bank").  Significant intercompany transactions and accounts
are  eliminated  in  consolidation.

The  financial statements for the three and nine months ended September 30, 2005
and  2004  are  unaudited  and  have  been  prepared  pursuant  to the rules and
regulations  of the Securities and Exchange Commission.  Certain information and
footnote  disclosures  normally  included  in  financial  statements prepared in
accordance with accounting principles generally accepted in the United States of
America  have  been condensed or omitted pursuant to such rules and regulations.
These  consolidated  financial statements should be read in conjunction with the
audited  consolidated  financial  statements  and  footnotes  included  in  the
Company's  annual  report  on  Form  10-K  for the year ended December 31, 2004.

In  the  opinion  of management, all adjustments necessary to present fairly the
financial  position and the results of operations and cash flows for the interim
periods  have been made.  All such adjustments are of a normal recurring nature.
The results of operations for the three and nine months ended September 30, 2005
are  not  necessarily  indicative of the results of operations which the Company
may  achieve  for  the  entire  year.

Some items in the prior period financial statements were reclassified to conform
to  the  current  presentation.

Note  2  -  Recent  Accounting  Pronouncements

SFAS  No.  123  (Revised  2004),  Accounting  for Stock-Based Compensation, will
require  most  public  entities,  effective at the beginning of the first annual
period  beginning  after  June 15, 2005, to compute the fair value of options at
the  date  of  grant  and  to  recognize  such  costs  as  compensation  expense
immediately  if there is no vesting period or ratably over the vesting period of
the  options.  Due  to the April 15, 2005, deferral of the effective date to the
beginning of the first annual period beginning after June 15, 2005, the Bank has
chosen  not to adopt the cost recognition principles of this statement for 2005.
If  the Bank had chosen to adopt these principles, an annual expense of $237,000
would be recorded for the year ending 2005.  Based on the options outstanding as
of  September  30, 2005, the expense would remain virtually constant in 2006 and
then  decline  in  succeeding


                                        8
<PAGE>
years  as  the  options  fully  vest.  The Bank will adopt SFAS No. 123 (Revised
2004)  as  of  January  1,  2006.

Note  3  -  Comprehensive  Income

Other  comprehensive income for the Company consists of net unrealized gains and
losses  on investment securities available for sale.  Total comprehensive income
for  the  three  months  ended  September  30,  2005  was $2,615,000 compared to
$4,579,000  for  the three months ended September 30, 2004.  Total comprehensive
income  for  the nine months ended September 30, 2005 was $6,303,000 compared to
$6,116,000  for  the  nine  months  ended  September  30,  2004.

Note  4  -  Stock-based  Compensation

The Company applies Accounting Principles Board (APB) Opinion No. 25, Accounting
for Stock Issued to Employees, and related interpretations in accounting for its
stock option plans.  Accordingly compensation cost is measured as the excess, if
any, of the quoted market price of the Company's stock at the date of grant over
the  amount  an  employee  must pay to acquire the stock.  Had compensation cost
been  determined  based  upon  the  fair value of the options at the grant dates
consistent  with  the  method recommended by SFAS No. 123, on a pro forma basis,
the  Company's  net  income  and income per share, on a pro forma basis, for the
three  and  nine  months  ended  September 30, 2005 and 2004 is indicated below.

<TABLE>
<CAPTION>
                                     Three Months Ended      Nine Months Ended
                                        September 30,           September 30,
                                   ----------------------  ----------------------
                                      2005        2004        2005        2004
                                   ----------  ----------  ----------  ----------
<S>                                <C>         <C>         <C>         <C>
Net income                         $2,598,597  $2,322,338  $7,088,318  $6,485,151
Deduct: Total stock-based
  Compensation expense determined
  Under fair value based method,
  net of related tax effect            64,352      51,969     172,874     155,907
                                   ----------  ----------  ----------  ----------
Pro Forma, net income              $2,534,245  $2,270,369  $6,915,444  $6,329,244
                                   ==========  ==========  ==========  ==========

Basic net income per share:
  As reported                      $     0.49  $     0.44  $     1.35  $     1.24
  Pro forma                        $     0.48  $     0.43  $     1.32  $     1.21

Diluted net income per share:
  As reported                      $     0.48  $     0.44  $     1.33  $     1.22
  Pro forma                        $     0.48  $     0.43  $     1.30  $     1.19
</TABLE>

Note  5  -  Cash  Dividend  Declared

On  July  18,  2005, the Company declared a quarterly cash dividend of $0.13 per
share  on  outstanding  shares.  The  dividend  was  paid  on August 15, 2005 to
shareholders  of  record  as  of  August  1,  2005.


                                        9
<PAGE>
On October 26, 2005, the Company declared a quarterly cash dividend of $0.13 per
share  on  outstanding  shares.  The dividend is payable on November 21, 2005 to
shareholders  of  record  as  of  November  7,  2005.


                                       10
<PAGE>
Item 2.   Management's  Discussion  and  Analysis of Financial Condition and
          Results  of  Operations

Overview
--------

The  Bank  was  organized by a group of local citizens and commenced business on
August 28, 1989.  It began operations with one branch.  Today, the Bank operates
eight  full  service  branches  in  Richmond  and  Columbia counties in Augusta,
Martinez,  and  Evans,  Georgia.  The  Bank  operates  two  mortgage origination
offices  in  Augusta,  Georgia,  and  Savannah,  Georgia.  The Savannah, Georgia
office  also offers construction lending services.  Bank and mortgage operations
are  located  in  Augusta,  Georgia  in two operations campuses located in close
proximity  to  the  main office in Augusta, Georgia.   Wealth management, trust,
and  retail  investment  services  are  located in the main office.  The Bank is
Augusta's  largest  community  banking  company.  On  July 12, 2005, the Company
announced its plans to expand outside its current markets by opening a branch in
Athens,  Georgia  and chartering a thrift in Aiken, South Carolina.  The Company
plans  to  open  the  Athens  branch  in  the  fourth  quarter  of  2005.

Richmond  and  Columbia  counties  have a diversified economy based primarily on
government,  transportation,  public  utilities,  health  care,  manufacturing,
construction,  and  wholesale  and  retail trade.  Augusta is one of the leading
medical  centers  in the Southeast.  The 2004 population of the Augusta-Richmond
County,  GA-SC  metropolitan  area  was  341,560, the second largest in Georgia.

The  Bank's  services include the origination of residential and commercial real
estate  loans,  construction  and development loans, and commercial and consumer
loans.  The  Bank  also  offers  a  variety  of  deposit  programs,  including
noninterest-bearing  demand,  interest  checking, money management, savings, and
time  deposits.  In  the  combined  Richmond and Columbia counties, the Bank had
17.84% of all deposits and was the second largest depository institution at June
30,  2005,  as  cited  from the Federal Deposit Insurance Corporation's website.
Securities  sold  under  repurchase  agreements  are  also  offered.  Additional
services  include wealth management, trust, retail investment, and mortgage.  As
a  matter  of  practice,  most  mortgage loans are sold in the secondary market;
however,  some mortgage loans are placed in the portfolio based on marketing and
balance  sheet  considerations.  The Bank continues to concentrate on increasing
its  market  share  through  various  new  deposit  and  loan products and other
financial  services  and  by  focusing  on  the customer relationship management
philosophy.  The  Bank is committed to building life-long relationships with its
customers,  employees,  shareholders,  and  the  communities  it  serves.

The  Bank's  primary source of income is from its lending activities followed by
interest  income  from  its  investment  activities, service charges and fees on
deposits,  and  gain  on  sale  of mortgage loans in the secondary market.  Loan
interest  income  increased  during the first nine months of 2005 as compared to
the first nine months of 2004 due to rising interest rates and increased volumes
while  gain on sales of mortgage loans decreased due to lower production levels.
Service  charges  and  fees  on  deposits  increased  for  the  first


                                       11
<PAGE>
nine  months  of  2005 as compared to the same period in 2004 as a result of new
retail  checking  account  products introduced in March 2004.  Other significant
contributors  to  income  are  trust  services fees, increases in cash surrender
value  of  life  insurance,  and  retail  investment  income.

The  Bank  continues  to  experience  steady  growth.  Over the past four years,
assets  grew  from  $405.8  million  at  December  31, 2000 to $706.5 million at
December  31,  2004.  At  September  30, 2005, assets were $825.8 million.  From
year  end  2000  to  year end 2004, loans increased $210.6 million, and deposits
increased  $245.9  million.  From December 31, 2004 to September 30, 2005, loans
increased  $67.7  million and deposits increased $89.1 million.  Also, from 2000
to  2004, return on average equity increased from 12.58% to 15.50% and return on
average  assets  increased from 1.08% to 1.29%.  At September 30 2005, return on
average  assets  was  1.24% and return on average equity was 15.60%.  Net income
for  the year ended 2000 was $4.0 million compared to net income of $8.7 million
at  year  end 2004.  Net income for the nine months ended September 30, 2005 was
$7.1  million.  The  Company  has  reached  a  level  of  maturity  evidenced by
long-term financial performance and stability that resulted in cash dividends of
$0.13  per  share  paid for each quarter of 2004, as well as for the first three
quarters  of  2005.

The  Bank meets its liquidity needs by managing cash and due from banks, federal
funds  purchased  and  sold,  maturity  of  investment securities, paydowns from
mortgage-backed  securities,  and  draws  on  lines  of  credit.  Additionally,
liquidity  can  be managed through structuring deposit and loan maturities.  The
Bank  funds loan and investment growth with core deposits, securities sold under
repurchase  agreements  and  wholesale borrowings.  During inflationary periods,
interest  rates  generally increase and operating expenses generally rise.  When
interest  rates  rise,  variable  rate  loans  and  investments  produce  higher
earnings; however, deposit and other borrowings interest expense also rise.  The
Bank  monitors  its  interest rate risk as it applies to income in a ramp up and
down annually 200 basis points (2%) scenario and as it applies to economic value
of  equity  in  a  shock  up  and down 200 (2%) basis points scenario.  The Bank
monitors  operating  expenses  through  responsibility  center  budgeting.

Forward-Looking  Statements
---------------------------

Southeastern  Bank Financial Corporation (the "Company") may, from time to time,
make  written or oral forward-looking statements, including statements contained
in  the  Company's  filings  with  the  Securities  and Exchange Commission (the
"Commission")  and  its  reports  to  shareholders.  Statements  made  in  such
documents,  other  than  those  concerning  historical  information,  should  be
considered forward-looking and subject to various risks and uncertainties.  Such
forward-looking  statements  are  made based upon management's belief as well as
assumptions made by, and information currently available to, management pursuant
to  "safe  harbor" provisions of the Private Securities Litigation Reform Act of
1995.  The  Company's  actual  results  may  differ  materially from the results
anticipated in forward-looking statements due to a variety of factors, including
unanticipated  changes  in  the  Bank's  local  economy,  the  national economy,
governmental  monetary  and  fiscal  policies, deposit levels, loan demand, loan
collateral values and securities portfolio values; difficulties in interest rate
risk  management;  the  effects  of


                                       12
<PAGE>
competition  in  the  banking  business;  difficulties  in  expanding the Bank's
business  into  new  markets; changes in governmental regulation relating to the
banking  industry, including regulations relating to branching and acquisitions;
failure of assumptions underlying the establishment of reserves for loan losses,
including  the  value  of  collateral  underlying  delinquent  loans;  and other
factors.  The Company cautions that such factors are not exclusive.  The Company
does not undertake to update any forward-looking statement that may be made from
time  to  time  by,  or  on  behalf  of,  the  Company.

Critical  Accounting  Policies
------------------------------

The  accounting  and  financial  reporting  policies  of  the Company conform to
accounting  principles generally accepted in the United States of America and to
general  practices  within  the banking industry.  Of these policies, management
has  identified  the  allowance  for loan losses as a critical accounting policy
that  requires  difficult,  subjective  judgment  and  is  important  to  the
presentation  of  the  financial  condition  and  results  of  operations of the
Company.

The allowance for loan losses is established through a provision for loan losses
charged  to  expense,  which  affects the Company's earnings directly. Loans are
charged  against the allowance for loan losses when management believes that the
collectibility of the principal is unlikely.  Subsequent recoveries are added to
the  allowance.  The  allowance  is  an  amount that management believes will be
adequate  to absorb losses on existing loans that become uncollectible, based on
evaluations  of  the  collectibility  of  loans.  The  evaluations  take  into
consideration  such  factors  as  changes  in  the nature and volume of the loan
portfolio,  historical loss rates, overall portfolio quality, review of specific
problem  loans,  and  current  economic  conditions and trends that may affect a
borrower's  ability  to  repay.

The Company segments its allowance for loan losses into the following four major
categories:  1)  identified  losses  for impaired loans; 2) general reserves for
Classified/Watch loans; 3) general reserves for loans with satisfactory ratings;
and  4)  general reserves based on economic and market risk qualitative factors.
Risk  ratings  are  initially  assigned  in  accordance with the Bank's loan and
collection  policy.  An  organizationally  independent  department reviews grade
assignments  on  an  ongoing  basis.  Management reviews current information and
events  regarding  a  borrower's  financial  condition and strengths, cash flows
available for debt repayment, the related collateral supporting the loan and the
effects of known and expected economic conditions.  When the evaluation reflects
a  greater  than  normal  risk  associated  with the individual loan, management
classifies  the  loan  accordingly.  If  the  loan is determined to be impaired,
management  allocates  a  portion of the allowance for loan losses for that loan
based  upon  the  present  value  of  future cash flows discounted at the loan's
effective  interest  rate,  or the fair value of the collateral if collection of
the  loan is deemed to be dependent upon the collateral.  Regulatory guidance is
also  considered.  Cash receipts for accruing loans are applied to principal and
interest  under the contractual terms of the loan agreement, where cash receipts
on  impaired  and  nonaccrual  loans  for which the accrual of interest has been
discontinued  are  applied  first  to  principal  and  then  to interest income.
Impaired  and  Classified/Watch  loans are aggressively monitored.  The reserves
for  loans  rated


                                       13
<PAGE>
satisfactory  are  further  subdivided into various types of loans as defined by
call  report  codes.  Qualitative  factors  are  based upon economic, market and
industry conditions that are specific to the Company's two local county markets.
These  qualitative  factors  include, but are not limited to, national and local
economic  conditions,  bankruptcy  trends,  unemployment  trends,  loan
concentrations,  and competitive factors in the local market.  These allocations
for the qualitative factors are included in the various individual components of
the allowance for loan losses.  The qualitative factors are subjective in nature
and  require  considerable  judgment  on  the  part of the Company's management.
However,  it is the Company's opinion that these factors represent uncertainties
in  the  Bank's  business  environment  that must be factored into the Company's
analysis  of  the  allowance  for  loan  losses.

Performance Overview -- Net Income
----------------------------------

The  Company's net income for the third quarter of 2005 was $2,599,000 which was
an  increase  of  $277,000  (11.9%) compared to net income of $2,322,000 for the
third  quarter of 2004.  Diluted net income per share for the three months ended
September  30,  2005  was  $0.48  compared  to  $0.44 for the three months ended
September  30,  2004.  Net  income  for  the  first  nine  months  of  2005  was
$7,088,000,  an  increase  of  $603,000  (9.3%)  compared  with  net  income  of
$6,485,000  for  the  first nine months of 2004.  The increase in net income for
the  three  and  nine months ended September 30, 2005 as compared with the three
and nine months ended September 30, 2004, was primarily a result of increases in
net  interest income, somewhat offset by an increase in the loan loss provision,
a  decrease  in noninterest income and an increase in noninterest expense.  Both
loan  interest  income  and  deposit  interest  expense  increased due to higher
interest  rates  and increased volumes.  The provision for loan losses increased
due  to increases in outstanding loan balances and the level of Classified debt.
Factors  contributing  to the decrease in noninterest income for the nine months
ended  September 30, 2005, were a decrease in the gain on sale of mortgage loans
in  the  secondary  market due to lower volumes, somewhat offset by increases in
service  charges  and  fees on deposits.  Retail checking accounts introduced in
March  2004  continue to generate increases in NSF fees and ATM income, somewhat
offset  by decreases in service charges.  Noninterest expense increased $727,000
during the nine-month period ended September 30, 2005 compared to the nine-month
period  ended  September  30, 2004.  This increase included $191,000 in expenses
related  to  the  Company's  expansion  into  new  markets.  Other  increases in
noninterest  expense  were  primarily  due to increases in salaries and employee
benefits  related  to company growth, increases in occupancy expenses related to
facilities  opened  in  February  and  September  2004,  and  increases in other
operating  expenses.  Significant changes in other operating expenses during the
nine-month period include increases in professional fees for trust advisory fees
and other advisory services and increases in staff development expense for sales
training.  These  increases  were somewhat offset by decreases in loan costs for
losses  that  were recorded in the first nine months of 2004 for a loan that was
sold  into  the  secondary  market  based  on  a  fraudulent  appraisal  and for
commercial  loan litigation settlement.  Additional factors include decreases in
processing  expenses  attributable  to  moving  ATM  processing in-house, retail
checking  products  expense,  and  the  expiration  of  commissions due under an
overdraft  protection  contract.


                                       14
<PAGE>
Total  assets  of  $825.8  million  at September 30, 2005 reflect an increase of
$119.3  million  (16.9%)  from  year-end  2004.  This  increase  is  primarily
attributable  to higher loan and investment balances since December 2004.  Total
loans at September 30, 2005 were $561.9 million which represented an increase of
$67.7  million  (13.7%)  from  December  31,  2004.  Since  December  31,  2004
investment  securities  increased $32.7 million (20.9%), cash and due from banks
increased  $10.8  million (81.9%), and federal funds sold increased $6.3 million
(50.9%).  These  increases  were  funded by increases in total deposits of $89.1
million  (16.0%),  increases  in  securities sold under repurchase agreements of
$13.6  million  (30.5%),  increases  in Federal Home Loan Bank advances of $12.0
million  (30.0%),  and  net  income  of $7.1 million less dividends paid of $2.0
million.

The  annualized  return on average assets for the Company was 1.24% for the nine
months  ended  September  30,  2005,  compared to 1.30% for the same period last
year.  While  total  assets  have  increased  $137.2 million since third quarter
2004,  net  income  has only increased $603,000, resulting in a decrease in ROA.
Increases  in  net  interest  income  were  somewhat  offset  by  decreases  in
noninterest  income and increases in noninterest expense and income tax expense.
The  annualized  return  on average stockholders' equity was 15.60% for the nine
months  ended  September  30,  2005, compared to 15.61% for the same period last
year.  The  steady  ratio  reflects  growth of both net income and stockholders'
equity  in  proportion  to  one  another  during  the  periods  compared.

Net  Interest  Income
---------------------


<TABLE>
<CAPTION>
                                                 Table 1 - Net Interest Income

                                  Three Months Ended                               Nine Months Ended
                                     September 30,              Variance             September 30,            Variance
                                ----------------------  ----------------------  ----------------------  ----------------------
                                   2005        2004       Amount         %         2005        2004       Amount         %
                                -----------  ---------  -----------  ---------  -----------  ---------  -----------  ---------
<S>                             <C>          <C>        <C>          <C>        <C>          <C>        <C>          <C>
                                                                     (Dollars in thousands)
Interest income:
  Loans, including fees         $    10,346  $   7,073  $     3,273      46.3%  $    27,861  $  20,505  $     7,356      35.9%
  Investment securities               2,001      1,845          156       8.5%        5,703      5,264          439       8.3%
  Federal funds sold                    132         29          103     355.2%          283         46          237     515.2%

Interest expense:
  Deposits                            3,747      1,785        1,962     109.9%        9,638      5,099        4,539      89.0%
  Federal funds purchased
    and securities sold under
    repurchase agreements               459        143          316     221.0%        1,081        455          626     137.6%
  Other borrowings                      609        471          138      29.3%        1,671      1,349          322      23.9%

Net interest income                   7,671      6,550        1,121      17.1%       21,473     18,914        2,559      13.5%
                                ===========  =========  ===========  =========  ===========  =========  ===========  =========
</TABLE>


                                       15
<PAGE>
Net interest income increased $1.1 million (17.1%) during the three-month period
and $2.6 million (13.5%) during the nine-month period as the result of increases
in  both  interest  income  and interest expense. Loan interest income increased
$3.3 million and $7.4 million in the three and nine month periods, respectively,
while  deposit  interest  expense increased $2.0 million and $4.5 million in the
three  and  nine  month periods, respectively, all the result of higher interest
rates  and  increased  volumes. Other contributing factors during both the three
and  nine  month  periods  included  increases  in interest income on investment
securities and federal funds sold and an increase in interest expense on federal
funds  purchased  and  securities  sold  under  repurchase agreements, again the
result of increased volumes and higher interest rates. Interest expense on other
borrowings also increased due to increased volumes somewhat offset by a decrease
in  the  average  interest  rate,  the  result of additional borrowings at lower
rates.  Interest-earning  assets  were  $770.6 million at September 30, 2005, an
increase  of  $127.7  million (19.9%) over September 30, 2004 and $107.2 million
(16.2%)  over  December  31,  2004.

The  Company's net interest margin for the three and nine months ended September
30,  2005  was 3.98% and 3.94%, respectively, as compared to 4.03% and 4.01% for
the  three  and nine months ended September 30, 2004, respectively.  The cost to
fund earning assets has increased at a slightly higher rate than the rate earned
on those assets resulting in a decrease in the net interest margin for the three
and  nine  month  periods.

Noninterest  Income
-------------------

<TABLE>
<CAPTION>
                                                Table 2 - Noninterest Income

                             Three Months Ended                                Nine Months Ended
                                 September 30,            Variance               September 30,             Variance
                           ----------------------  -----------------------  ----------------------  -----------------------
                              2005        2004       Amount         %          2005        2004       Amount         %
                           ----------  ----------  -----------  ----------  ----------  ----------  -----------  ----------
<S>                        <C>         <C>         <C>          <C>         <C>         <C>         <C>          <C>
                                                                (Dollars in thousands)
Service charges and fees
  on deposits              $    1,391  $    1,342  $       49         3.7%  $    3,957  $    3,628  $      329         9.1%
Gain on sales of loans          1,520       1,462          58         4.0%       3,860       4,367        (507)     (11.6%)

Noninterest income              3,282       3,321         (39)      (1.2%)       9,172       9,434        (262)      (2.8%)
                           ==========  ==========  ===========  ==========  ==========  ==========  ===========  ==========
</TABLE>


Noninterest  income  decreased  $262,000  (2.8%)  during  the nine-month period.
Contributing  factors  included  decreases in gain on sales of mortgage loans in
the  secondary market due to lower mortgage loan volumes which are primarily the
result  of  the rising interest rate environment, increased competition, reduced
staff  in existing offices, and the closing of the Nashville, Tennessee mortgage
office.  These  decreases  were partially offset by increases in service charges
and fees on deposits during the nine- month period primarily due to increases in
NSF  fees and ATM income, somewhat offset by decreases in service charges, all a
result  of  new  retail  checking  accounts.


                                       16
<PAGE>
Noninterest  Expense
--------------------

<TABLE>
<CAPTION>
                                               Table 3 - Noninterest Expense

                               Three Months Ended                              Nine Months Ended
                                  September 30,            Variance              September 30,            Variance
                            ----------------------  ----------------------  ----------------------  ----------------------
                               2005        2004       Amount        %          2005        2004       Amount        %
                            ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------
<S>                         <C>         <C>         <C>         <C>         <C>         <C>         <C>         <C>
                                                                 (Dollars in thousands)
Salaries                    $    3,236  $    2,991  $      245        8.2%  $    9,000  $    8,625  $      375        4.3%
Employee benefits                  769         693          76       11.0%       2,354       2,190         164        7.5%
Occupancy expenses                 687         672          15        2.2%       2,043       1,934         109        5.6%
Other operating expenses         1,753       1,559         194       12.4%       4,993       4,914          79        1.6%
                            ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------
Total noninterest expense   $    6,445  $    5,915  $      530        9.0%  $   18,390  $   17,663  $      727        4.1%
                            ==========  ==========  ==========  ==========  ==========  ==========  ==========  ==========
</TABLE>

Noninterest  expense increased $530,000 (9.0%) during the three-month period and
$727,000  (4.1%) during the nine-month period.  Noninterest expense attributable
to  the  Company's  expansion  into new markets totaled $151,000 for the quarter
ended September 30, 2005.  Salary expense and employee benefits increased during
the three and nine month periods primarily as the result of company growth.  The
increase  in occupancy expenses during the nine-month period is primarily due to
depreciation  and maintenance expense on the Walton Way Operations Campus opened
in  February 2004 and the Cotton Exchange branch which opened in September 2004.
Other  operating  expenses increased $194,000 (12.4%) for the three-month period
primarily  due to professional fees related to expansion of the Company.  During
the  nine-month  period,  other  operating  expenses  increased  $79,000 (1.6%).
Professional  fees  increased  $208,000  (34.8%) primarily due to trust advisory
fees  and other advisory services.  Staff development expense increased $137,000
(46.0%)  primarily due to sales training.  Increases in other operating expenses
were  partially  offset  by  a  $131,000  (14.8%) decrease in processing expense
primarily  attributable  to  moving  ATM  processing  in-house,  retail checking
products  expense,  and  the  expiration  of the contract to pay commissions for
overdraft  protection.  Other  expenses in the first nine months of 2004 include
$150,000  related  to  a  loan which was sold into the secondary market that the
Company  was  required to repurchase based on a fraudulent appraisal and $50,000
for  a  commercial  loan  litigation  settlement.

Income  Taxes
-------------

Income  tax expense in the third quarter of 2005 totaled $1,320,000, an increase
of  $181,000 (15.9%) over the third quarter of 2004.  The effective tax rate for
the  three  months  ended  September  30,  2005  and  2004  was 33.7% and 32.9%,
respectively.  Income  tax  expense for the nine months ended September 30, 2005
totaled  $3,591,000 for an effective tax rate of 33.6% compared to 33.0% for the
nine  months  ended  September 30, 2004.  The increase in the effective tax rate
for both the three and nine month periods is primarily due to an increase in the
income  tax rate resulting in an adjustment to deferred income taxes in 2004 and
a decrease in cash surrender value, somewhat offset by an increase in tax exempt
municipal  income.


                                       17
<PAGE>
Asset  Quality
--------------

Table  5  which  follows  shows  the  current  and  prior  period  amounts  of
non-performing assets.  Non-performing assets were $4.5 million at September 30,
2005,  compared  to  $3.0  million  at  December  31,  2004  and $2.7 million at
September 30, 2004.  This increase is primarily due to $1.6 million in loans for
three  customers  who have filed bankruptcy.  The ratio of non-performing assets
to  total  loans and other real estate was 0.80% at September 30, 2005, compared
to  0.60% at December 31, 2004 and 0.57% at September 30, 2004.  The control and
monitoring  of  non-performing  assets continues to be a priority of management.

There  were  $29,000  and  $8,000  of  loans  past due 90 days or more and still
accruing  at December 31, 2004 and September 30, 2004, respectively.  There were
no  loans  past  due  90  days or more and still accruing at September 30, 2005.

Allowance  for  Loan  Losses
----------------------------

The  allowance  for  loan losses represents a reserve for probable incurred loan
losses  in the loan portfolio.  The adequacy of the allowance for loan losses is
evaluated  periodically  based  on  a  review  of  all  significant  loans, with
particular  emphasis  on  impaired, non-accruing, past due, and other loans that
management  believes  require  special  attention.  The  determination  of  the
allowance  for  loan  losses  is  considered a critical accounting policy of the
Company.  See  "Critical  Accounting  Policies."

When  reviewing  the allowance for loan losses, it is important to understand to
whom  the Company lends.  At September 30, 2005, the loan portfolio is comprised
of  82.20%  real  estate  loans.  Commercial,  financial  and agricultural loans
comprise  11.42%,  and  consumer  loans  comprise  6.36%  of  the  portfolio.

While the Company has 82.20% of its loan portfolio secured by real estate loans,
this  percentage is not significantly higher than in previous years.  Commercial
real  estate  comprises  30.12%  of  the  loan  portfolio and is primarily owner
occupied  properties  where  the operations of the commercial entity provide the
necessary cash flow to service the debt.  For this portion of real estate loans,
repayment  is  not  dependent upon liquidation of the real estate.  Construction
and  development (29.42%) has been an increasingly important portion of the real
estate  loan  portfolio.  The  Company  carefully  monitors  the  loans  in this
category  since  the  repayment  of  these loans is generally dependent upon the
liquidation  of  the  real estate and is impacted by national and local economic
conditions.  The residential category, 20.61% of the portfolio, represents those
loans  that the Company chooses to maintain in its portfolio rather than selling
into  the  secondary market for marketing and competitive reasons and commercial
loans  secured  by  residential  real  estate.  The  residential  held  for sale
category,  2.05%  of  the  portfolio, comprises loans that are in the process of
being  sold  into  the  secondary  market.  In  these loans, the credit has been
approved  by  the  investor  and  the  interest  rate locked so that the Company
minimizes  credit  and  interest  rate  risk  with  respect  to  these  loans.

The  Company  has  no  large  loan  concentrations  to  individual  borrowers or
industries.  Unsecured  loans  at  September  30, 2005 were $10.8 million. While
management  uses


                                       18
<PAGE>
available  information  to  recognize  losses  on loans, future additions to the
allowance may be necessary based on changes in economic conditions. In addition,
various  regulatory  agencies, as an integral part of their examination process,
periodically  review  the Company's allowance for loan losses. Such agencies may
require  the  Company  to  recognize  additions  to the allowance based on their
judgments  about information available to them at the time of their examination.

Additions to the allowance for loan losses are made periodically to maintain the
allowance  at an appropriate level based upon management's analysis of potential
risk in the loan portfolio.  Loans determined to be uncollectible are charged to
the  allowance  for  loan  losses  and  subsequent  recoveries  are added to the
allowance.  A  provision  for  losses  in  the amount of $589,000 was charged to
expense  for  the  quarter ended September 30, 2005 compared to $493,000 for the
quarter  ended  September  30,  2004, and $1.6 million for the nine months ended
September  30, 2005 compared to $1.0 million for the nine months ended September
30,  2004.  The  higher  provision for the three and nine months ended September
30,  2005  as  compared to the three and nine months ended September 30, 2004 is
due  to  increases  in  outstanding  loan  balances, the level of Classified and
Watch-rated  debt,  and  specific  reserves.

At  September 30, 2005 the ratio of allowance for loan losses to total loans was
1.62%  compared  to  1.60% at December 31, 2004 and 1.61% at September 30, 2004.
Management  considers  the  current  allowance for loan losses appropriate based
upon  its analysis of the potential risk in the portfolio, although there can be
no  assurance  that the assumptions underlying such analysis will continue to be
correct.

Liquidity  and  Capital  Resources
----------------------------------

The  Company's  liquidity  remains  adequate  to meet operating and loan funding
requirements.  The  loan  to  deposit  ratio  at  September  30,  2005 was 87.0%
compared  to  88.8%  at  December 31, 2004 and 86.6% at September 30, 2004.  The
decrease  in  the  loan to deposit ratio from December 31, 2004 to September 30,
2005  reflects deposit growth at a higher rate than loan growth during the first
nine  months  of 2005.  The increase in the loan to deposit ratio from September
30,  2004 to December 31, 2004 reflects significant loan growth during that time
period.  Deposits  at  September  30,  2005  and December 31, 2004 include $30.6
million  and  $34.9  million  of brokered certificates of deposit, respectively.
The  Company  has also utilized borrowings from the Federal Home Loan Bank.  The
Company maintains a line of credit with the Federal Home Loan Bank approximating
10%  of  the  Bank's  total  assets.  Federal  Home  Loan  Bank  advances  are
collateralized  by  eligible  first  mortgage  loans, and commercial real estate
loans.  These  borrowings  totaled  $52.0  million  at  September 30, 2005.  The
Company  maintains  repurchase  lines of credit with SunTrust Robinson Humphrey,
Atlanta,  Georgia,  for  advances up to $20.0 million and with The Bankers Bank,
Atlanta,  Georgia,  for  advances  up  to $10.0 million of which no amounts were
outstanding  in  either  case  at September 30, 2005.  The Company has a federal
funds  purchased  accommodation  with  The  Bankers  Bank, Atlanta, Georgia, for
advances  up  to  $16.7  million  and  with  SunTrust Bank, Atlanta, Georgia for
advances up to $10.0 million.  Additionally, liquidity needs can be satisfied by
the  structuring  of the maturities of investment securities and the pricing and


                                       19
<PAGE>
maturities  on  loans  and deposits offered to customers.  The Company also uses
retail  securities  sold under repurchase agreements to fund growth.  Securities
sold  under  repurchase  agreements  were  $58.2  million at September 30, 2005.

Shareholders' equity to total assets was 7.66% at September 30, 2005 compared to
8.35%  at December 31, 2004 and 7.95% at September 30, 2004.  The capital of the
Company  and  the  Bank exceeded all required regulatory guidelines at September
30,  2005.  The  Company's  Tier  1  risk-based,  total  risk-based and leverage
capital  ratios  were  9.80%,  11.05%, and 7.90%, respectively, at September 30,
2005.  Table  6  which follows reflects the current regulatory capital levels in
more  detail,  including  comparisons  to  the  regulatory  minimums.

Management  is  not  aware  of  any  events or uncertainties that are reasonably
likely  to  have a material effect on the Company's liquidity, capital resources
or  operations.

Commitments  and  Contractual  Obligations
------------------------------------------

The Bank is a party to lines of credit with off-balance sheet risk in the normal
course  of  business  to  meet  the  financing needs of its customers.  Lines of
credit are unfunded commitments to extend credit.  These instruments involve, in
varying  degrees,  exposure  to  credit  and interest rate risk in excess of the
amounts  recognized  in the financial statements.  The Bank's exposure to credit
loss  in  the  event  of  nonperformance  by  the  other  party to the financial
instrument  for  unfunded  commitments to extend credit and letters of credit is
represented  by the contractual amount of those instruments.  The Bank evaluates
construction  and acquisition and development loans for the percentage completed
before  extending  additional credit.  The Bank follows the same credit policies
in  making  commitments  and  contractual  obligations as it does for on-balance
sheet  instruments.

Unfunded commitments to extend credit where contract amounts represent potential
credit risk totaled $198.8 million at September 30, 2005.  These commitments are
primarily  at  variable  interest  rates.

The  Company's  commitments  are  funded  through  internal  funding  sources of
scheduled  repayments of loans and sales and maturities of investment securities
available  for  sale  or external funding sources through acceptance of deposits
from  customers  or  borrowings  from  other  financial  institutions.

The  following table is a summary of the Company's commitments to extend credit,
commitments  under  contractual  leases  as  well  as  the  Company' contractual
obligations,  consisting  of deposits, FHLB advances, which are subject to early
termination  options,  and  borrowed  funds by contractual maturity date for the
next  five  years.


                                       20
<PAGE>
<TABLE>
<CAPTION>
Table 4 - Commitments and     Due in    Due in    Due in    Due in    Due in
Contractual Obligations       1 Year   2 Years   3 Years   4 Years   5 Years
---------------------------  --------  --------  --------  --------  --------
<S>                          <C>       <C>       <C>       <C>       <C>
Lines of credit              $198,799         -         -         -         -
Lease agreements                   82        73         5         -         -
Deposits                      293,818   105,268    97,969    40,146    42,588
Securities sold under
  repurchase agreements        58,167         -         -         -         -
FHLB advances                   5,000         -         -         -    28,000
Other borrowings                1,000         -         -         -         -
                             --------  --------  --------  --------  --------
  Total commitments and
    contractual obligations  $556,866  $105,341  $ 97,974  $ 40,146  $ 70,588
                             ========  ========  ========  ========  ========
</TABLE>

Although management regularly monitors the balance of outstanding commitments to
fund loans to ensure funding availability should the need arise, management
believes that the risk of all customers fully drawing on all these lines of
credit at the same time is remote.

Effects of Inflation and Changing Prices
----------------------------------------

Inflation  generally  increases  the cost of funds and operating overhead and to
the  extent  loans  and  other  assets  bear  variable rates, the yields on such
assets.  Unlike  most  industrial  companies,  virtually  all  of the assets and
liabilities  of  a  financial  institution are monetary in nature.  As a result,
interest  rates generally have a more significant impact on the performance of a
financial institution than the effects of general levels of inflation.  Although
interest  rates  do  not  necessarily move in the same direction and to the same
extent  as  the  prices  of goods and services, increases in inflation generally
have  resulted in increased interest rates.  In addition, inflation can increase
a  financial  institution's  cost  of  goods and services purchased, the cost of
salaries  and  benefits,  occupancy  expense  and  similar items.  Inflation and
related  increases  in  interest  rates  generally  decrease the market value of
investments  and  loans  held  and may adversely affect liquidity, earnings, and
stockholders'  equity.  Mortgage  originations  and refinancings tend to slow as
interest  rates  increase,  and  can  reduce  the  Company's  earnings from such
activities  and  the  income  from the sale of residential mortgage loans in the
secondary  market.


                                       21
<PAGE>
<TABLE>
<CAPTION>

TABLE 5
-------

                          SELECTED FINANCIAL DATA
                          (Dollars in Thousands)

                                   Nine Months Ended September 30,
                              -------------------------------------
PROFITABILITY                       2005                2004
-------------                 -----------------  ------------------
<S>                           <C>                <C>
Return on average assets *                1.24%               1.30%

Return on average equity *               15.60%              15.61%

ALLOWANCE FOR LOAN LOSSES
-------------------------

Beginning balance, January 1  $          7,930   $           7,278
Provision charged to expense             1,576               1,013
Recoveries                                 714                 543
Loans charged off                       (1,126)             (1,248)
                              -----------------  ------------------
Ending balance, September 30  $          9,094   $           7,586
                              =================  ==================
</TABLE>

<TABLE>
<CAPTION>
NON-PERFORMING ASSETS        September 30, 2005   December 31, 2004   September 30, 2004
---------------------
<S>                          <C>                  <C>                 <C>
Non-accrual loans            $             4,513  $            2,972  $             2,623
Other real estate owned                        0                  53                   58
                             -------------------  ------------------  -------------------
Total non-performing assets  $             4,513  $            3,025  $             2,681
                             ===================  ==================  ===================


LOANS PAST DUE 90 DAYS OR
MORE AND STILL ACCRUING      $                 0  $               29  $                 8
                             ===================  ==================  ===================
</TABLE>


* Annualized


                                       22
<PAGE>
<TABLE>
<CAPTION>
TABLE 6
-------

                                     Regulatory Capital Requirements
                                           September 30, 2005
                                         (Dollars in Thousands)

                                                         Required for capital
                                       Actual              adequacy purposes             Excess
                                Amount       Percent      Amount      Percent      Amount      Percent
                              ------------------------  -----------------------  -----------------------
<S>                           <C>          <C>          <C>         <C>          <C>         <C>
Southeastern Bank Financial
Corporation

Risk-based capital:
  Tier 1 capital              $    63,520        9.80%      25,933        4.00%      37,587        5.80%
  Total capital                    71,636       11.05%      51,867        8.00%      19,769        3.05%
Tier 1 leverage ratio              63,520        7.90%      32,157        4.00%      31,363        3.90%


Georgia Bank & Trust Company

Risk-based capital:
  Tier 1 capital              $    60,237        9.31%      25,870        4.00%      34,367        5.31%
  Total capital                    68,334       10.57%      51,741        8.00%      16,593        2.57%
Tier 1 leverage ratio              60,237        7.51%      32,095        4.00%      28,142        3.51%
</TABLE>


                                       23
<PAGE>
Item 3.  Quantitative and Qualitative Disclosures About Market Risk

As of September 30, 2005, there were no substantial changes in the interest rate
sensitivity  analysis or the sensitivity of market value of portfolio equity for
various  changes  in  interest  rates  calculated  as of December 31, 2004.  The
foregoing  disclosures  related to the market risk of the Company should be read
in  conjunction  with  the  Company's audited consolidated financial statements,
related  notes  and  management's discussion and analysis of financial condition
and  results  of operations for the year ended December 31, 2004 included in the
Company's  2004  Annual  Report  on  Form  10-K.

Item  4.  Controls  and  Procedures

As  of  the end of the period covered by this report, the Company carried out an
evaluation,  under  the  supervision and with the participation of the Company's
management,  including  the  Company's  President  and  Chief  Executive Officer
(principal  executive  officer)  and  its  Executive  Vice  President  and Chief
Operating  Officer  (principal  financial  officer), of the effectiveness of the
design  and  operation  of  the  Company's  disclosure  controls  and procedures
pursuant to Exchange Act Rule 13a-15.  Based upon that evaluation, such officers
concluded that the Company's disclosure controls and procedures are effective in
timely  alerting them to material information relating to the Company (including
its  consolidated subsidiaries) that is required to be included in the Company's
periodic  filings  with the Securities and Exchange Commission.  There have been
no  significant  changes in the Company's internal controls or, to the Company's
knowledge,  in  other  factors  that  could  significantly affect those internal
controls  subsequent  to  the  date  the Company carried out its evaluation, and
there  have  been no corrective actions with respect to significant deficiencies
or  material  weaknesses.


                                       24
<PAGE>
                                     Part II
                                OTHER INFORMATION


Item 1.   Legal  Proceedings

          There  are  no material pending legal proceedings to which the Company
          or  any  of  its  subsidiaries  is  a  party  or of which any of their
          property  is  subject.

Item  2.  Unregistered  Sales  of  Equity  Securities  and  Use  of  Proceeds

          Issuer  Purchases  of  Equity  Securities

          On  April  15, 2004, the Company announced the commencement of a stock
          repurchase  program,  pursuant  to  which  it will, from time to time,
          repurchase  up to 100,000 shares of its outstanding stock. The program
          does  not  have a stated expiration date. No stock repurchase programs
          were terminated during the third quarter of 2005. There were no shares
          repurchased  under  an  existing  stock  repurchase  plan or otherwise
          during  the  third  quarter  of  2005.

Item 3.   Defaults  Upon  Senior  Securities

          Not  applicable

Item 4.   Submission  of  Matters  to  a  Vote  of  Security  Holders

          None

Item 5.   Other  Information

          None

Item 6.   Exhibits

          31.1 Certification  of Chief Executive Officer Pursuant to Section 302
               of  the  Sarbanes-Oxley  Act  of  2002.

          31.2 Certification  of Chief Financial Officer Pursuant to Section 302
               of  the  Sarbanes-Oxley  Act  of  2002.

          32.1 Certification  of  Chief  Executive  Officer  and Chief Financial
               Officer  Pursuant  to  Section  906  of the Sarbanes-Oxley Act of
               2002.


                                       25
<PAGE>
                     SOUTHEASTERN BANK FINANCIAL CORPORATION
                              Form 10-Q Signatures


     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

                                       SOUTHEASTERN BANK FINANCIAL CORPORATION



Date: November 3, 2005                 By:   /s/ Ronald L. Thigpen
      ----------------                    --------------------------------------
                                             Ronald L. Thigpen
                                             Executive Vice President, Chief
                                             Operating Officer (Duly Authorized
                                             Officer of Registrant and Principal
                                             Financial Officer)


                                       26